Kathmandu, February 25:

The government of Japan has agreed to extend a grant assistance of six hundred and fifty million Yen (Rs 5,42,750,000) under the Food Aid plan — also known as KR scheme of Japan’s fiscal year 2008 — to Nepal for food aid.

Finance Secretary Rameshore Prasad Khanal Japan’s ambassador to Nepal Tatsuo Mizuno today signed the agreement on behalf of their respective governments at the Finance Ministry here.

The grant will help procure rice for supplying it to food deficit districts via Nepal Food Corporation. It is expected that the assistance would be fruitful for developing the food security policy of the government and stabilising the economy.

Speaking at the signing ceremony, the finance secretary said that the aid would help provide relief and help complete socio-economic development projects for people in remote areas.

Envoy Mizuno said that the extended food assistance would be able to help Nepal in addressing the urgent need in the food deficit districts.

“According to recent estimates, approximately 2.5 million people in rural Nepal are in immediate need of food assistance.

An additional 3.9 million people are at the risk of suffering food shortage due to increasing food prices,” he said adding that the price of staple foods for Nepalis has been rising significantly.

Japan — one of the major development partners of Nepal — has been providing food aid to Nepal for the last few years. Food Aid is one of the oldest schemes of the government of Japan. In 2007, it provided 7.4 billion Yen to Nepal. As of fiscal year 2008, Japan has given Nepal a total of 91,732 tonnes of rice, 24,300 tonnes of wheat, worth approximately 7.4 billion Yen.